Reuniting the financial community

 

Thousands of banks use SWIFT to increase their reach, achieve operational cost efficiencies and enhance their customer service. In a conversation with Jenny Kassis, Sido Bestani, Head of Middle East, North Africa & Turkey, SWIFT talks about the latest compliance-related services and solutions that allow their clients to exchange financial information securely.

 

Please give us an overview about SWIFT and its activities.

 

SWIFT is a member-owned cooperative which enables the financial world to conduct its business operations with confidence, certainty and speed. More than 10,000 financial institutions and corporations in 212 countries trust us every day to exchange millions of standardized financial messages. This activity involves the secure exchange of proprietary data while ensuring its confidentiality and integrity.

 

Our broader industry role industry is two-fold. We provide the proprietary communications platform, products and services that allow our customers to connect and exchange financial information securely and reliably. We also act as the catalyst that brings the financial community together to work collaboratively to shape market practice, define standards and consider solutions to issues of mutual interest. In addition to messaging over the SWIFT network, we offer a growing range of value-added products and services. For example, our Business Intelligence portfolio of products enables institutions to analyze their business and benchmark themselves against their peers. It can also identify opportunities in the market or weaknesses in a business model. SWIFT also has a growing suite of compliance products, including Sanctions Screening and Sanctions testing, which help firms to comply with global financial crime regulations. Our consulting and services offerings help organizations to increase standardization, integration and automation across their operations, eliminating risk and improving efficiency.

 

Could you please give us more details about your service “Sanction Screening”?

 

SWIFT’s Sanctions Screening service combines a highly sophisticated transaction screening engine with SWIFT’s security, resilience and reliability to create a world-class shared service. As soon as the solution is activated, it routes a financial institution’s messages in certain predefined categories to a centrally-hosted filter where they are screened against that institution’s choice of sanctions lists. The screening engine checks for matches from sanctions lists using logical tests to detect anagrams, inversion of letters, missing letters, misspellings, abbreviations and phonetic similarities. Because Sanctions Screening is located in the “cloud”, there is no technology footprint for the customer, meaning it is quick and easy to subscribe and the product is managed by SWIFT.

 

Governments and international policy makers now regularly use financial sanctions as a tool to fight financial crime, money laundering and terrorist financing. As a result, financial institutions face growing pressure to maintain strong sanctions compliance programs. Sanctions compliance is complex and costly, and the penalties for noncompliance can be severe. It is also a major operational issue for financial institutions. Successful compliance requires accurate, up-to-date sanctions list information, and a reliable, resilient filter system to screen transactions effectively. The fact that sanctions lists are continually evolving and can change on a daily basis only adds to the complexity and risk.

 

Based on our position at the heart of the international financial system, SWIFT is uniquely positioned to help the industry to meet these challenges. Compliance is a ‘non-competitive’ area and we take a community-based approach to delivering compliance-related services and solutions.

 

How do you enable your customers to automate financial transactions?

 

SWIFT helps its customers to automate financial transactions by enabling them to “standardize” transactions. This means that IT platforms and software applications can be integrated, and standardized messages are able to pass from one system to another without the need to re-key information. This lowers costs, reduces operational risk and eliminates inefficiencies from financial institutions’ operations.

 

This streamlining of operations is further supported by technical and business assessments by SWIFT Consulting Services, which enable financial institutions and corporates to analyze their existing infrastructure and processes. By using SWIFT, customers can also create new business opportunities and revenue streams. For example, by analyzing their SWIFT traffic using our suite of Business Intelligence tools, they can identify and benchmark their performance in a particular market, geography, product or currency. This enables them to highlight opportunities, gaps in the market, or threats to their business.

 

You have recently announced the Know Your Customer service; could you please elaborate more on this utility?

 

SWIFT’s global Know Your Customer (KYC) Registry is a centralized utility for the collection and distribution of standard information required by banks as part of their due diligence processes. Based on a collaborative industry-wide approach, the new utility will help banks to meet KYC-related regulations and to reduce the high costs associated with compliance challenges. SWIFT's KYC Registry is currently under development and will go live in 2014. The new service will provide banks with access to a central repository of up-to-date institutional information collected by SWIFT from participating banks. SWIFT will host and manage the utility, verifying the completeness, validity and accuracy of the data provided, whilst member banks will retain ownership of and responsibility for their own information.

 

The KYC Registry will initially focus on correspondent banking requirements, which is the most urgent challenge facing the industry, but SWIFT may subsequently extend the service. Compliance with financial crime regulation around the world is one of the biggest challenges that banks have to face. Because regulatory compliance is recognized as a non-competitive area and because SWIFT sits at the center of the financial industry, our customers are increasingly asking us to provide industry-wide solutions for these challenges. SWIFT’s KYC Registry leverages our core strengths: our community, our network, our expertise in standards, and our track record of operational excellence. With financial crime compliance now at the top of the international regulatory agenda, SWIFT has created a dedicated Compliance Services unit to manage its growing compliance services offering and is building a team of sanctions, KYC and anti-money-laundering (AML) industry experts to build solutions serving the needs of financial institutions worldwide.

 

How does it help banks to manage compliance challenges and reduce the high costs associated?

 

KYC Regulations require banks to collect and maintain up-to-date information about other institutions that they deal with. Doing this and performing due diligence checks on correspondent banking partners are time-consuming tasks, which are duplicated by individual banks around the world. By developing a central, global KYC Registry, SWIFT can help banks reduce KYC-related costs and mitigate compliance-related risks, enabling them to more easily manage their financial crime compliance processes.

 

What are your growth plans for the next few years?

 

Globally, SWIFT is expanding to new markets and new clients. For example, SWIFT is thought of primarily as a bank network, but the number of corporates, investment managers and financial market infrastructures using SWIFT is growing rapidly. We have tailored our product set to suit new client groups, such as Lite2 our Cloud-based interface specifically designed for smaller, lower volume users. We will continue to actively grow these communities and to design products and services that meet their requirements.

 

Equally, we are continually extending the range of products and services that leverage our unique position in the industry, such as our new Compliance division. Our Business Intelligence portfolio, for example, encompasses a suite of intuitive tools including Watch Analytics, Watch Insights and SWIFT Economics. These are designed to grow with a customer’s business needs, and offer easy access to unique data, enable users to benchmark themselves against competitors, identify business opportunities and to optimize their IT and processes. The global financial industry faces a growing range of challenges, which are putting pressure on operational efficiency, cost control and even on business models. These include new regulation, rising costs and ballooning risk. It means that banks increasingly need a better understanding of their global banking and counterparty networks, to be able to better manage their capital and liquidity, and to streamline their infrastructures. SWIFT is the ideal partner to help institutions navigate these issues, providing expert knowledge and support.

 

About Sido Bestani:

 

Sido Bestani is Head of Middle East, North Africa & Turkey at SWIFT. He holds a Bachelor of Science in mathematics and a Masters degree in mechanical engineering. He began his career as an IT consultant, before working for several years as a trader for insurance company, COFACE. Sido joined SWIFT for five years, working first as a training instructor then moving into a sales role. He left SWIFT to join Paris-based investor services firm CACEIS. Sido rejoined SWIFT in 2007, based in Dubai. In 2008 he was appointed Head of Middle East & North Africa. Since then, he has been instrumental in building out SWIFT’s business and creating a consulting services hub in the region.

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